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Plaintiff Awarded $3.1M For Nightclub Assault After Defendants Snub Settlement Offer of $1.4M

The case of Maras v. Seemore Entertainment Ltd., 2013 BCSC 1842, involved a Plaintiff who was assaulted outside a Downtown Vancouver nightclub. Liability for the incident was shared by the corporate Defendant, which owned the nightclub, and three of the club’s security personnel or “bouncers”, in a judgment delivered on June 9, 2014 The Plaintiff was found not to be contributorily negligent.

Before trial, the Plaintiff had made three separate formal offers to settle the matter:

  1. The first offer, made on March 6, 2012, was for $1,800,000 plus costs and disbursements, in exchange for a consent dismissal order on a without costs basis. This offer was not responded to by the Defendants.
  2. The second offer was made on April 3, 2012, approximately two weeks before a 20 day trial was set to commence with a jury, though trial did not proceed at that time. This offer was also in the amount of $1,800,000 plus costs and disbursements, payable by the Defendant Seemore Entertainment Ltd., in exchange for a consent dismissal order on a without costs basis. Additionally, the Plaintiff offered to waive his claim for punitive damages and all claims against the other parties, upon payment. This offer had been left open for over one year, and was formally withdrawn on June 27, 2013.
  3. The third offer to settle was made on September 9, 2013. This offer was for $1,425,000 plus costs and disbursements. The Plaintiff additionally offered to waive his claim for punitive and exemplary damages, if the offer was accepted. This offer was left open for acceptance for ten days, but the Defendants again did not respond.

Prior to commencement of the trial on April 7, 2014, three of the Defendants had made one offer to settle, which was put forward on June 3, 2011, in the amount of $20,000 inclusive of costs but not disbursements.

At trial, the Plaintiff was awarded damages in the amount of $3,084,200.

The Court now had to consider judgment in relation to costs. The applicable principles in this assessment included Supreme Court Civil Rule 9-1(4)-(6):

Offer may be considered in relation to costs

(4) The court may consider an offer to settle when exercising the court’s discretion in relation to costs.

Cost options

(5) In a proceeding in which an offer to settle has been made, the court may do one or more of the following:

(a) deprive a party of any or all of the costs, including any or all of the disbursements, to which the party would otherwise be entitled in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle;

(b) award double costs of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle;

(c) award to a party, in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle, costs to which the party would have been entitled had the offer not been made;

(d) if the offer was made by a defendant and the judgment awarded to the plaintiff was no greater than the amount of the offer to settle, award to the defendant the defendant’s costs in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle.

Considerations of court

(6) In making an order under subrule (5), the court may consider the following:

(a) whether the offer to settle was one that ought reasonably to have been accepted, either on the date that the offer to settle was delivered or served or on any later date;

(b) the relationship between the terms of settlement offered and the final judgment of the court;

(c) the relative financial circumstances of the parties;

(d) any other factor the court considers appropriate.

Also considered were a number of principles generated in case law, which had been outlined in the case of Bideci v. Neuhold 2014 BCSC 1212, examined at [31]:

(a) the party “seek[ing] to displace the usual rule [as to costs] has the burden of persuading the judge that the rule should be displaced: Giles v. Westminster Savings and Credit Union, 2010 BCCA 282 (CanLII) at para. 75, citing Grassi v. WIC Radio Ltd., 2001 BCCA 376 (CanLII) at para. 24;

(b)  the overarching purpose of Rule 9-1 is to promote reasonable settlements and to attach some consequences to the failure of a party to accept a reasonable settlement: Brewster v. Li, 2014 BCSC 463 (CanLII) at paras. 15-16;

(c)  the present Rules provide the court with considerable discretion to define and fix an appropriate cost award: Brewster v. Li at para. 14, citing Bailey v. Jang, 2008 BCSC 1372 (CanLII) at paras. 10, 18. The presumption under Rule 14-1(9) that a successful party is entitled to his costs is subject to the broad purpose of Rule 9-1 and the opportunity for judicial discretion under Rule 9-1(4) in that “the court may consider an offer to settle when exercising its discretion in relation to costs. Rule 9-1(5) enumerates the orders the court may make. In making an order under subrule (5), the court may consider the factors listed in subrule (6)”: Wafler v. Trinh, 2014 BCCA 95 (CanLII) at para. 79 [emphasis in the original];

(d)  unlike under the former Rule 37, it is not mandated under Rule 9-1 that a plaintiff who rejects a reasonable offer should face some sort of sanction. Rather, “[t]he permissive wording in Rules 9-1(5) and (6) indicates the legislature intended to preserve the historically discretionary nature of costs awards, including an award of costs where an offer to settle has been made”: Wafler v. Trinh at para. 82 [emphasis added in Bideci v. Neuhold];

(e)  in addition to indemnifying a successful litigant, the purposes for which cost rules exist were articulated by Frankel J.A. for the court in Giles v. Westminster at para.74 and include:

      • “deterring frivolous actions or defences”: Houweling Nurseries Ltd. v. Fisons Western Corp. (1988), 1988 CanLII 186 (BC CA), 37 B.C.L.R. (2d) 2 at 25 (C.A.), leave to appeal to the S.C.C. refused, [1988] 1. S.C.R. ix
      • “to encourage conduct that reduces the duration and expense of litigation and to discourage conduct that has the opposite effect”: Skidmore v. Blackmore, [1995] 2 B.C.L.R. (3d) 201 at 208 (C.A.);
      • “encouraging litigants to settle whenever possible, thus freeing up judicial resources for other cases”: Bedwell v. McGill, 2008 BCCA 526 (CanLII) at para. 33; and
      • “to have a winnowing function in the litigation process” by “requir[ing] litigants to make a careful assessment of the strength or lack thereof of their cases at the commencement and throughout the course of the litigation”, and by “discourag[ing] the continuance of doubtful cases or defences”: Catalyst Paper Corporation v. Companhia de Navegação Norsul, 2009 BCCA 16 (CanLII) at para.16.

The Court found that the proposition that a plaintiff should face sanctions for not accepting a reasonable offer applies equally to defendants. The question then turns to whether any of the formal offers were ones that ought reasonably to have been accepted by the Defendants, an indicator being whether or not the offer was within the range of reasonably expected outcomes.

In finding that all three of the offers were not offers that ought reasonably to have been accepted by the Defendants, the Court pointed to the following, at [46]:

      • the examinations for discovery of all the defendants were not completed until the fall of 2013;
      • the garnering of medical and other evidence by both the plaintiff and the defendants, but particularly the defendants, pertaining to the plaintiff’s injuries and the effect on his functioning was ongoing after Offer #3 expired;
      • the plaintiff’s biomechanical engineering expert report pertaining to the forces required to cause the plaintiff’s injuries was not served on the defendants until January 2014; and
      • the change to the court-ordered discount rate came into effect as of April 30, 2014, after the commencement of the trial and after the plaintiff’s economist had testified. Mr. Carson prepared revised reports that increased the defendants’ maximum exposure for damages for loss of earning capacity and cost of future care by almost $1 million. He was also recalled to give evidence with respect to his revised reports dealing with this issue.

However, the Court did find that significant cost consequences were applicable to the unsuccessful Defendants, in their decision to see the case through a lengthy jury trial. The reasons for this included factors discussed at [47]:

  1. a)    by mid-January 2014 at the latest, the defendants were well aware of the risks they were assuming in taking this action to trial;b)    while offers to settle are often left open for acceptance up to the eve of trial, it is not a prerequisite to the court’s exercise of discretion on costs that this occur;c)    insofar as liability was concerned, by mid-January 2014, all examinations for discovery had been completed and the individual defendants’ denial of any involvement had been tested under oath. In addition, the plaintiff’s biomechanical engineering report had been received. The defendants chose not to serve any engineering report in response;d)    I do not accept the defendants’ submission that the conduct of the plaintiff’s counsel impeded their ability to access Mr. Caines-Walker and Ms. Frigon, the two independent witnesses to the incident. In August 2012, the defendants brought an application to examine these two witnesses under oath. This application was dismissed by Master Scarth with liberty to re-apply. The basis of this order was that a list of written questions had been provided by defence counsel to be answered by Mr. Caines-Walker and Ms. Frigon and if counsel were not satisfied with the responses received then there was liberty to reapply to examine these potential witnesses under oath. Defence counsel was satisfied with the answers received and an examination under oath was not pursued;e)    as for the defendants’ exposure on damages, they knew or should have been well aware by mid-January 2014 as to the potential magnitude of the claim. The defence experts were in agreement that the plaintiff had sustained a complicated mild traumatic brain injury. There was an issue as to whether cognitive behavioral therapy had been undertaken by the plaintiff and, if not, the extent to which that therapy could assist him in the future. However, there was no real dispute that the plaintiff’s functioning had been seriously compromised by the injuries that he had sustained. He was a young man in his 20s. There was a serious claim advanced as to the loss of a potential professional soccer career. The evidence led on the plaintiff’s behalf that his future employability would likely be restricted to a sheltered environment was not seriously tested by the defendants’ experts;f)     the plaintiff made three attempts to settle his claims;g)    the only offer made by the defendants prior to the trial commencing in April 2014 was the June 2011 offer for $20,000 plus disbursements; andh)  notwithstanding this set of circumstances, the defendants, as counsel candidly admitted during submissions, made the decision, which was their right, “to take the case to trial and let the jury decide”.

The Court awarded the Plaintiff costs at 1.5 of the unit amounts for the preparation and attendance at the trial, as of January 15, 2014, and the Defendants were ordered to pay  costs on the basis of one and one-half counsel for preparation and attendance at trial.

October 3rd, 2014
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